We have shown that all coronary progenitors arise exclusively from the epicardial anlagen termed the _roepicardium (PE). It is currently unknown, however, how and when the various coronary vascular cell rpes, including endothelial cells, are induced and what mechanisms govern their entry into the heart. Our preliminary data show that PE formation occurs in the mesoderm immediately posterior to the presumptive heart tube and in close proximity to the underlying endoderm-derived liver primordium. A subpopulation of PE cells express differentiation markers for either endothelial or smooth muscle cells. Furthermore, migration of PE cells can be activated by a myocardium-derived paracrine signal(s). Finally, several BMP members, expressed by the myocardium, can activate migration of embryonic endothelial cells. These data lead to the hypothesis that coronary progenitors, including endothelial cells, are induced and recruited to the heart via a three-step mechanism: 1) specification of PE cells within the mesoderm, 2) induction of a vascular cell fate within the PE, and 3) directional migration of the coronary progenitors to the heart. We will test these three specific hypotheses by: determining a novel inductive role of the liver primordium in the PE fate specification (Aim 1);identifying the differentiation potential of individual PE cells (Aim 2);and testing a chemoattractant role of myocardium-derived BMP signaling in targeted migration of coronary progenitors to the heart (Aim 3). The studies proposed here will identify the regulators of three critical steps in establishing coronary arterial vasculature and build a foundation for rational therapeutics of coronary disorders in adults.